Market Downtrend Trigger Bitcoin Inflows From Institutional Investors


The market is still in chaos as the price of Bitcoin has now fallen to $30K. This was preceded by declining market confidence which led to less/more outflows in the last two weeks. However, with the price now dropping to its lowest levels, this year the institutional sentiment towards a digital asset has shifted, and this has led to significant inflows into digital assets for the first time in weeks.

$45 million flows into Bitcoin

Bitcoin has now seen Inflows after several weeks of outflows. The past week has proven itself well for the leading cryptocurrency that has seen inflows of up to $45 million. It is a complete turnaround on the part of the institutional investor who has been withdrawing funds from digital assets that were supposed to be put into their crypto wallets.

Related reading | Bitcoin trading flows hit a three-month high as market approaches for more downside

Naturally, these institutional investors were pulling out when indicators were pointing to a bear market, and they are now back to take their share of the pie with bitcoin trading at low prices. It marks the return of positive sentiment among these investors.

Bitcoin short also followed the same trend and entered the wave with the second largest weekly flows ever. Last week saw a total influx of $4 million into the bitcoin short which has now taken its total assets under management (AuM) to a new high of $45 million.

Bitcoin price chart from TradingView.com

BTC struggles to find support above $31,000 | Source: BTCUSD on TradingView.com

Other digital asset investment products have not been excluded from the exuberant stream. This time around, there was a total of $40 million pouring into digital asset investment products in a surprising turnaround.

Altcoins are not excluded from this although outflows have been more dominant in the past week. However, Solana will step away from the mold in this regard as being the only altcoin to have recorded any significant inflows with $1.9 million flowing into digital assets.

As for other cryptocurrencies, outflows continue as negative sentiment continues to destabilize the cryptocurrency. It saw $12.5 million leave the digital asset in a one-week period. So far, 0.8% of the total Ethereum AuM has left the digital asset, with outflows so far reaching $207 million.

Related reading | Bitcoin price collapses below $30K as markets show signs of paranoia

Inflows and outflows remained inconsistent across different market regions. CoinShares reports that investment products in North American markets have reached $66 million. Across Al Baraka in Europe, outflows totaling $26 million dominated digital asset investment products in the region.

However, the new trend of inflows into assets like Bitcoin and Solana is proving that institutional investments are out of the woods to take advantage of the price weakness that has been exposed in the market. This price weakness continues as Bitcoin continues to struggle to establish a support level above the $31,000 price range.

Featured image from Investopedia, chart from TradingView.com



Leave a Comment

Your email address will not be published.